The Tables Have Turned | Truth Or Skepticism

Tom flips the script on this episode of “Truth Or Skepticism”, and interviews Dylan Ratigan. They move away from options trading, as Tom is skeptical of many things in Dylan’s world - most notably, financial media. The two debate everything from financial media moguls, to the fed policy and how it affects investors.

Why do we lack enthusiasm for learning about finance?

Money creates a whole series of negative emotions in people.

— Dylan Ratigan

Dylan explains that he believes there is a lack of self-confidence among the public in terms of being able to control and grow their finances, which is why there is generally a lack of enthusiasm to be more knowledgeable about the subject. Tom disagrees and believes low fee index investing has killed the idea of learning about finance.

I don’t see it as a confidence issue, I see it as a challenge, and maybe we think there’s an alternative that’s better than us (professional advisors / index funds), so we don’t take that challenge.

— Tom Sosnoff

Have the federal policies worked?

Have the fed policies worked in (the sense that) so far they (have) re-inflated equity & real estate prices to the levels they were at, or even above levels they were at before the financial crisis? Yes they have worked.

— Dylan Ratigan

Dylan states that the fed policies have worked in the sense that they have re-inflated asset levels, but those exact policies are a massive fundamental problem that will create much bigger problems later.

Does Dylan Ratigan want higher interest rates?

I want real, dynamic, floating interest rates that adjust to demand for capital that are not controlled by 12 people in a room in Washington, DC that make up numbers.

— Dylan Ratigan

Dylan & Tom come to the same terms on this one, as they both want interest rate reform. Dylan wants a dynamic interest rate structure, and Tom agrees. Tom explains that desire is essentially the desire to have a free market when it comes to interest rates.

Where did traditional financial media go wrong?

Dylan breaks financial media into two groups - the WSJ & Bloombergs of the world, and the CNBC and NYTimes of the world. He believes the executives at the former group have a better understanding of markets, but aren’t experts at relaying that information to the everyday reader. On the flip side, the latter group wants to get paid, so their interests lie in the ad buyers who are paying them.

So the problem in your eyes is that the master you’re serving is not the people watching. The master that you’re serving is the people buying.

— Tom Sosnoff

The priority for the financial media is to secure the attention of people using the cheapest, easiest means possible, which is [human] identity fear and greed and turning that into money, which has nothing to do with investment.

— Dylan Ratigan

What is intelligent investing?

[Intelligent investing is] The use of your resources, not just your money but all of your talents, and driving that into the growth of an enterprise that offers value to other people.

— Dylan Ratigan

Dylan explains that there is more to investing than just money, and more to life than just investing. He believes in putting it all on the line and going for it...personal enterprise investing. In the markets, he’s learned that everything seems to be chaotic and random except for implied volatility, so investing around that is also intelligent.

If the predictable dynamic is the mean reversion of implied volatility, intelligent investing is understanding how to interpret the mean reverting characteristics of implied volatility, and being able to put on trades that interpret the extremes in implied volatility in a way that positions you to profit from mean reversion.

— Dylan Ratigan

This is only a snippet of the segment, so be sure to watch the entire episode below!

To see earlier episodes of Truth or Skepticism with Dylan Ratigan, you can check them out here!

Since Dylan last graced Chicago with his presence, markets have become a bit more choppy. Today’s Truth or Skepticism largely focused on potential opportunities and how Tom is positioning his portfolio.

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